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The Stock Market Is Missing the Warning From Junk

Declines in high-yield bonds are worrying Wall Street, as such moves can presage economic downturns

By

Matt Wirz

Updated Dec. 7, 2015 3:32 p.m. ET

Junk bonds are headed for their first annual loss since the credit crisis, reflecting concerns among investors that a six-year U.S. economic expansion and accompanying stock-market boom are on borrowed time.

U.S. corporate high-yield bonds are down 2% this year, including interest payments, according to Barclays PLC data. Junk bonds have posted only four annual losses on a total-return basis since 1995.